Coal to top Pakistan’s list of resources by 2023

Coal to top Pakistan’s list of resources by 2023
In this file photo, a Pakistani worker prepares corn in an traditional coal oven at a house in Lahore on May 20, 2016. Coal is on its way to becoming Pakistan’s top resource for power generation, even though it continues to remain off the government’s priority list for sources of electricity, officials said on Monday. (AFP)
Updated 30 July 2019

Coal to top Pakistan’s list of resources by 2023

Coal to top Pakistan’s list of resources by 2023
  • Government aims to discourage expensive RLNG and coal purchases for generation of electricity
  • Coal usage up by 38.4% in FY19 followed by RLNG at 36.1%

KARACHI: Coal is on its way to becoming Pakistan’s top resource for power generation, even though it continues to remain off the government’s priority list for sources of electricity, officials said on Monday.
During the fiscal year FY19, the country produced 122,708 GWh (Gigawatt hour) of power, up 1.6 percent, as compared to 120,719 GWh in FY18. 
Meanwhile, coal power generation increased by 38.4 percent during the FY19 as compared to 36.1 percent of RLNG and 14 percent of hydel generation.
On the other hand, power generation through the use of furnace oil declined by 60 percent, National Electric Power Regulatory Authority (NEPRA) data, compiled by Arif Habib Limited (AHL) Research, shows.
“The cost of power generation through coal is low as compared to other sources after hydel. At present, coal and gas are competing with each other. Coal is a competitive resource and that was made possible with the start of operations of new power plants on coal,” Samiullah Tariq, director of research at AHL told Arab News.
Coal is emerging as the major source for the generation of electricity in power-hungry Pakistan which has negotiated major deals with China under the ambitious, multibillion-dollar China-Pakistan Economic Corridor (CPEC) project.
Under CPEC, nine power projects – at an estimated cost of $9.63 billion – had been planned with China, out of which two plants, in Sindh and Punjab provinces, have commenced operations while others are in the process.
Meanwhile, the country’s 4,260 MW power generation is being planned by using imported coal while 3,960 MW will be generated by utilizing indigenous coal, according to Private Power Infrastructure Board (PPIB).
However, the government has decided to discourage coal power generation in pursuit of cheaper resources, which includes hydel. 
“The priority of the PTI government is hydel, solar and winding power. We have to work on this. Policy of the government is that we will not work on LNG and coal. Whatever (coal power projects) is in the process will continue and be maintained,” Fida Muhammad, Chairman of the Senate’s committee on Power told Arab News. 
Pakistan’s coal deposits are around 200 billion tons, with major reserves located in Thar, Sindh. The coals of Pakistan are high in sulfur and ash content. The moisture percentage is also high in Sindh coal, especially in the Thar coal which encourages imports.
The country imported 15.50 million tons of MT coal while 5.50 MT was produced domestically during the outgoing fiscal year, according to the Pakistan Economic Survey of 2018-19.
During the outgoing fiscal year Pakistan also exported 208 metric tons of coal worth $51,000, which indicates a 100 percent export growth, according to Pakistan Bureau of Statistics.
Pakistan has been marred by violent protests in the past due to frequent power outages, but has historically relied on costly imported fuels such as furnace oil and other petroleum goods. The country imported $14.4 billion worth of petroleum goods during the fiscal year FY19, which amounted to 26.3 percent of the country’s total imports of $54.7billion, data shows. 
Despite being discouraged by the incumbent government, analysts forecast that coal could become the top resource for power generation by 2023 by claiming 24 percent share of the energy mix.
“Going forward, the share of power generation will increase because Thar coal is now on and a major power plant of Hubco is about to start operations that would also increase the coal demand,” Samiullah added.
Another coal-fired power plant in Lahkhra, Sindh is expected to commence operations, but this time for domestic coal. “The previous government wanted to run the Lakhra Power House on imported coal but this government’s policy is to set up power plants from where coal is being extracted. The plant incurred losses of Rs 15 million in case of a shutdown and Rs 3 billion in case of being operational,” Fida Muhammad said, adding that “next month, we would be restarting this plant with local coal utilization”.
In pursuit of cheaper power generation, “the provincial government of Khyber Pakhtunkhwa has signed agreements for 2400-2500 MW hydel power generation”.
“The thinking of the government is to encourage hydel power generation. The local coal is still not cheap as compared to the hydel power generation which has multiple benefits including irrigation,” Muhammad said, adding that this was because “coal is costly, causes pollution and third reason is that we are importing it”.
Environmentalists also expressed reservations on the exploration and utilization of coal, reasoning that it is globally classified as a dirty energy source.
“The open pit mining in Thar is a threat to the fauna and flora and the people of the area. The ecology of the area is at risk. It would be an environmental disaster, particularly in Thar, in the face of the changing climate,” Nasir Panhwar, an environmentalist, told Arab News.
According to International energy agency IEA, the global coal demand will be stable through 2023. Coal’s contribution to the global energy mix will decline from 27 percent to 25 percent, particularly due to the growth of renewables and natural gas.

Energy mix of Pakistan by year 2023
Resource June 2019 June 2023
Hydel 29.2% 20.9%
RLNG 27.5% 19.5%
Coal 15.5% 24.5%
Gas 14.3% 14.0%
RFO 5.3% 5.2%
Others 4.2% 4.1%
Nuclear 4.1% 11.8%

Source: AHL Research